For-Profit Hospital Business Models

Hudson County is at a crossroads. Last week, the community faced the prospect that Christ Hospital would be sold to Prime Healthcare Services. If the sale had proceeded, four of the county’s hospitals would have been owned and operated by for-profit entities. Christ would have joined Meadowlands Hospital Medical Center, Bayonne Medical Center and Hoboken University Medical Center as institutions no longer dedicated solely to delivering quality and affordable health care services to their patients.

Prime Healthcare Services pulled its bid to buy a New Jersey hospital last week, saying it was deferring to the wishes of local elected officials who wanted to see the hospital remain a locally operated nonprofit.

The proposed deal met strong resistance from a health workers union and a community group that aired concerns over Prime’s business model.

Prime leaders and Christ Hospital attorneys also faced tough questions from health regulators and the New Jersey attorney general’s office, including queries about billing practices based on findings of a yearlong investigation by California Watch. The nonprofit investigative news operation has identified a pattern at Prime Healthcare of billing Medicare for treatment of rare conditions among its elderly patients – conditions that enable the chain to reap lucrative bonus payments.

Within the span of 19 months, Hudson County residents have witnessed the sale of one of the local hospitals – Meadowlands Hospital Medical Center in Secaucus – and the pending sales of two others, Hoboken University Medical Center and Christ Hospital in Jersey City. In all three instances, the hospitals switched, or will switch, from nonprofit ownership to become for-profit entities.

These sales come just a few years after the closures of Greenville Hospital and St. Francis Hospital in Jersey City, and three years after Bayonne Medical Center also changed hands from nonprofit to for-profit ownership.